Banks can lower the cost of information production by applying one information resource to many different services. This process is called
A)economies of scale.
B)asset transformation.
C)economies of scope.
D)asymmetric information.

Question

Quizplus · Accepted Answer

Economies of scope refer to the cost savings that arise when a bank uses the same information resource to offer multiple services. This can help reduce duplication of effort, lower costs of research and development, and improve overall efficiency. Economies of scale refer to cost savings that stem from higher production levels, while asset transformation involves the process of converting low-risk assets into higher-risk assets. Asymmetric information refers to situations in which one party in a transaction has more information than the other party, which can lead to market inefficiencies.

Banks Can Lower the Cost of Information Production by Applying